A reverse mortgage is a loan that allows homeowners who are 62 or older to borrow against a portion of the equity in their home. A reverse mortgage works differently than a traditional mortgage loan, however. Instead of making payments to your lender, your lender will pay you. The loan first pays off your existing mortgage. If you have one, then you can use the remaining funds for anything you’d like. You must continue paying your property taxes and homeowners insurance and are responsible for maintaining the home.
The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage (HECM).
• To qualify for a reverse mortgage, you must be 62 or older, own your property outright, or have paid a significant amount.
• The property must be your primary residence and have over 50% equity.
• Federal debt delinquencies are not permitted, and you must have the financial resources to pay ongoing property fees such as taxes and homeowner association fees on time.
• Reverse mortgage borrowers must attend a counseling session required by HUD.
There are also Property Requirements and Financial Requirements, which you can review on the HUD’s website.
Need more information? Feel free to contact us! We’d be happy to answer all your reverse mortgage questions.